Our 12-year-old son couldn't have asked for a more effective closing argument in the ongoing case for his first cell phone. Make sure your child brings an electronic device, read the e-mail about the school dance, as there will be a digital scavenger hunt.

His case had been building all year. His teacher invited them to use their phones to take photos for their blogs. There was that group text he missed out on about a pickup game of basketball. Ultimately, my husband and I agreed: there were plenty of reasons to justify a decision to buy his first cell phone. But how to do it responsibly? That required some research on our part—and a waiting period for our son while we brainstormed a plan that covered everything from using the phone as a personal finance-teaching moment to devising a contract that would encourage safe, responsible behavior. Here's what we found out:

Establish Want Versus Need

My son wants a new iPhone 6, but we had different plans: to give him one of our own, older models. Without realizing it, we had just given him his first lesson. "Every money conversation and every purchase of any significant size in the household is an opportunity to teach kids about the difference between wants and needs," says Ron Lieber, author of The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money and the "Your Money" columnist for The New York Times.

Once need is established, the next issue is more complex. "It's really the most cosmic question of human existence, but applies well to the world of money," Lieber says, "How much is enough? Once you've established need, how much of it do you need?"

That question encompasses everything from the type of phone to its features, megapixels, and data plan. If you want to be "super hardcore," Lieber says, you can start with an embarrassingly uncool flip phone. Make it clear that your child technically doesn't need anything more than that, and offer to upgrade the relic after, say, 3 months if he's passed the responsibility test: He don't lose or break it. From there, you can cover the more expensive smartphone and the basic data plan.

If your kid is angling for the upgraded model, case, or plan—as our son has pointed out, phones dictate social status—characterize that request as a "want" that must be paid for (at least in part) with allowance, holiday, or birthday money. "Learning to make trade-offs is part of what it means to be a grownup," Lieber says, "and making grownups out of kids is the business we're in."

Raise a Digital Citizen

Once we told our son he could get a smartphone, his fixation intensified. One day after school, I found him sitting in a tree listening to music—on my phone. "If I had my own..." he said for the fifteenth time that week. But we weren't about to just hand one over and let him loose. As Uncle Ben in Spider Man wisely said (admittedly in a different context), "With great power, comes great responsibility."

"You're essentially putting a PC in their pocket: One which opens a vast digital world in which there are endless ways to connect and communicate," says Scott Steinberg, author of Netiquette Essentials: New Rules for Minding Your Manners in a Digital World. "It's vital that we prepare them beforehand for life in a virtual world where almost anything is just a click or tap away. Even more important than teaching kids how to use devices appropriately is how to be responsible and caring digital citizens—and where to turn for assistance should they encounter any of the hazards life in an online world can bring."

For many parents, digital citizenship starts with a written contract signed by parent and child, highlighting that the phone is a privilege, not a right, and that it can be taken away at any time for any reason. Common elements of that contract include when the cell phone can be used (before bedtime and not at the dinner table, church, or while doing homework) and how (within the limits of the data plan, with the knowledge that the child will be expected to take financial responsibility for a lost or broken device, and the promise not to download any apps without permission).

The contract can also cover digital etiquette: I will treat others the way I wish to be treated and I will not bully, embarrass, or send inappropriate pictures or messages. While it's impossible to cover every scenario, contracts should be used as a jumping off point for ongoing conversations about unintended consequences, such as the possibility that anything you write in a text can be copied and pasted in a very public way. Callahan Walsh, a child advocate with the National Center for Missing and Exploited Children, which operates an online, web safety resource called NetSmartz, suggests kids use this guidepost:

"Don't send a text unless you're okay with sharing it with your grandmother."

Help Keep Them Safe

Parenting in the smartphone age can be terrifying, but there are plenty of resources to help. The first step is closing the information gap. Whatever you know, your kid probably knows more.

Check out NetSmartz and Common Sense Media for a wide range of resources, including tips on tightening up privacy (teaching your kid to, say, turn off location-tracking services so she isn't unintentionally publicizing her location) and warning signs that an online predator is connecting with your child.

Words like cyberbullying and sextortion are enough to make any reasonable parent consider tracking their child's every digital move. Many popular service providers offer features that allow you to check in on your child's texting activity, monitor apps, limit phone usage to certain times of day, and block unwanted calls and texts. There are also third-party options like Ourpact, which lets you manage your kid's phone remotely, allowing you to turn off all apps or set a schedule for approved usage.

But constant monitoring isn't necessarily the answer. "You can go blue in the face trying to keep up and chasing this digital breadcrumb trail," says Walsh. And for all the monitoring tools, there are just as many that help kids conceal information. That calculator icon on your kid's phone? It may be innocuous. Or, Walsh says, it may be controlled by a secret passcode that "reveals a secondary repository for images and media files you aren't able to access through the regular camera role." (Really worried your kiddo is up to no good? Our local police department recently invited parents to bring in their kids' cell phones so they can show us what's hidden from the screen. Check with your own department; it may have an expert in cell phone forensics willing to do the same.)

Both Walsh and Steinberg agree that the most important step is empowering your kids to make safe, smart decisions. Spend time with your child watching and reading tutorials at Common Sense Media and NetSmartz, and model good behavior. Keep the lines of communication open, and encourage them to come directly to you if they see something questionable or controversial. Assure them that you'll remain calm if they come to you for advice. Ultimately, helping your kids avoid the pitfalls of smartphone usage requires the same set of tools you've always relied on as a parent. Says Steinberg, "Being involved is the single biggest step when it comes to keeping kids safe."